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Article
Publication date: 14 November 2017

David Hay and Carolyn Cordery

This paper explores the value of financial statement auditing in the public sector. The study applies theory about auditing from the private sector as well as the public…

Abstract

This paper explores the value of financial statement auditing in the public sector. The study applies theory about auditing from the private sector as well as the public sector to explore ways in which public sector auditing can be expected to be valuable. It shows that there are a number of complementary explanations that can be applied to examine the value of public audit, including agency, signaling, insurance, management control, governance and confirmation explanations. The evidence from research and history is generally consistent with the agency and management control explanations. There is some support for the signaling and insurance explanations, while research evidence suggests that governance has differing impact in the public sector compared to the private. The confirmation hypothesis is also potentially relevant. Reviewing the history of the development of public sector auditing functions shows that at least some developments were consistent with explanations such as agency theory and management control. Auditing in the public sector is an area where more research is valuable. The paper concludes with a discussion of issues for further investigation.

Details

Journal of Accounting Literature, vol. 40 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 1 March 1987

Kenneth S. Most

A consideration of the history of management auditing suggests that the evolution of non‐financial audit and the rise of the internal auditor can be traced back to audit's…

1726

Abstract

A consideration of the history of management auditing suggests that the evolution of non‐financial audit and the rise of the internal auditor can be traced back to audit's earliest origins and that modern financial audit is a special case of more general auditing. Professional audit came about partly through legislation and partly to serve the interests of companies. In the USA, as a narrower purpose of audit took hold, companies and government responded by the development of an internal audit function to fill the gap.

Details

Managerial Auditing Journal, vol. 2 no. 3
Type: Research Article
ISSN: 0268-6902

Keywords

Book part
Publication date: 9 November 2016

Naoko Komori

Globalization has brought about migration and the transnational movement of people from different backgrounds, cultures, ethnicities, using different languages, and has…

Abstract

Globalization has brought about migration and the transnational movement of people from different backgrounds, cultures, ethnicities, using different languages, and has thereby facilitated intercultural interaction and re-interpretation of lived experiences. Gender research in accounting is also influenced by globalization, which has created a platform where different cultures can meet and interact, and where knowledge can be synthesized from the work of authors from various different countries. Building on my own research experiences and their outcomes, this study examines the globalization of gender research in accounting by tracing the development of research on the relationship between Japanese women and accounting. The experiences of Japan highlight that knowledge in accounting, including gender-in-accounting studies, historically flows from West to East. The language, concepts and framework in existing Western-led accounting studies translate and visualize the history and phenomena in a Japanese context to be shared within the international accounting arena.

This study demonstrates that this process provides a body of interesting evidence from Japanese contexts in the fields of history, household accounting and professionalization. Accounting played an enabling role for women in Japan, while positioning women to act as catalysts for social change. Questions arise regarding the potential for such findings (from the East) to flow to the West and be accorded equal status to Western-led accounting research. The study concludes by discussing, in terms of achieving sustainable and innovative knowledge creation in accounting, the importance of herstory in understanding local culture and its integration into ‘global’ academic research.

Details

Accounting in Conflict: Globalization, Gender, Race and Class
Type: Book
ISBN: 978-1-78560-976-3

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Article
Publication date: 1 May 2000

Xu‐Dong Ji

Outlines the history of accounting in China and reviews the literature published in English on the full range of Chinese accounting issues. Summarizes the contents of…

1340

Abstract

Outlines the history of accounting in China and reviews the literature published in English on the full range of Chinese accounting issues. Summarizes the contents of three books, refers to sections in other books and analyses journal articles by period, journal, research topic and research method. Argues that this accounting research has historical, academic and practical value,believes it will continue to improve and calls for greater use of more rigid research methodologies in this area.

Details

Managerial Finance, vol. 26 no. 5
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 1 July 2003

Dale L. Flesher, William D. Samson and Gary John Previts

Evidence of audit committee activity in the formative years of the Baltimore & Ohio (B&O) Railroad indicates that control and reporting activity developed long before the…

1438

Abstract

Evidence of audit committee activity in the formative years of the Baltimore & Ohio (B&O) Railroad indicates that control and reporting activity developed long before the existence of regulatory mandate or the external auditing function. This is the earliest example of such an organized and continuing activity in American business history. With no previous business experience to model this enterprise, the organizers of the corporation put in place an audit committee of directors as a control device to safeguard assets and ensure proper handling of cash receipts and disbursements. Research into primary materials establishes that the committee not only performed regular routine audits of the “treasurer’s report,” but also identified and addressed critical problems of control and payment weaknesses. The discovery of the function of value‐for‐money (VFM) auditing by a committee of directors establishes historical context for today’s audit process and audit committee. Because the B&O was such an important entity, it influenced other railroads; and the railroad industry, in turn, greatly influenced the development of modern American businesses during the Industrial Revolution.

Details

Managerial Auditing Journal, vol. 18 no. 5
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 15 February 2008

Stephen P. Walker

This paper seeks to review the accounting history content of Accounting, Auditing & Accountability Journal (AAAJ) over the last 20 years and to identify distinctive…

5114

Abstract

Purpose

This paper seeks to review the accounting history content of Accounting, Auditing & Accountability Journal (AAAJ) over the last 20 years and to identify distinctive research themes therein. Observations and suggestions are offered in relation to future accounting history research.

Design/methodology/approach

The study comprises an analysis of the content of AAAJ and related literature.

Findings

Histories appearing in AAAJ have focused on technical issues, accounting in business organisations, cost and management accounting, accounting historiography, professionalisation, and socio‐cultural studies of accounting. The journal has been an important medium for the pursuit of interdisciplinarity, the promotion and practical application of new research methods, methodological pluralism, and searches for convergence in historical debates.

Research limitations/implications

The paper discusses the potential for advancing established research agendas in accounting history and identifies some new subjects for investigation by accounting historians.

Originality/value

It is suggested that, while methodological innovation and plurality are to be applauded, the sustained application of new approaches should also receive greater encouragement. Searches for rapprochement in accounting history debate run the risk of stultifying historical controversy. It is argued that histories of management accounting, gender, class, professionalisation are far from “complete” and should be reignited through the adoption of broader theoretical, temporal and spatial parameters. An emphasis on the performative aspects of accounting in socio‐cultural histories is encouraged, as is clearer recognition of the significance of contemporary understandings of the boundaries of accounting. Also emphasised is the desirability of more indigenously sensitised histories of the profession, greater engagement with the “literary turn”, and a renewed commitment to interdisciplinarity.

Details

Accounting, Auditing & Accountability Journal, vol. 21 no. 2
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 15 January 2018

Dorota Dobija

The purpose of this paper is to explain the origins and evolution of auditing and control by linking the changes in the manner in which the audits were conducted with the…

Abstract

Purpose

The purpose of this paper is to explain the origins and evolution of auditing and control by linking the changes in the manner in which the audits were conducted with the changes in the institutional function and development of the English East India Company (EIC).

Design/methodology/approach

Using Sunder’s contract theory of a firm as an interpretive framework, this paper introduces to the debate material documenting the evolution of the auditing practice during a period of 40 years using the single case of the EIC.

Findings

Auditing in the EIC evolved from a simple adjudication on allowable expenditures to ex post verification of transactions, and from using volunteers to paid auditors. Initially, the company was organized into a series of separate, terminable stocks, and simple verification by volunteer auditors chosen from among the shareholders was sufficient to secure the latter’s interests. When the increasing number, size, and complexity of transactions by the EIC rendered the adjudication approach insufficient, ex post verification of financial transactions was added. With a clearer separation between ownership and control at the time of the introduction of permanent joint stock, the audit function assumed a more professional form.

Originality/value

This paper contributes to the research on the early modern period at a time of the formation and rapid development of the first joint-stock organization. It offers a dynamic picture of the evolution of control and auditing as a response to the growth of business, organizations, and the attendant challenges of governance.

Details

Accounting, Auditing & Accountability Journal, vol. 31 no. 1
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 1 August 1995

Ian P. Dewing and Bernard C. Williams

Audit committees have a relatively long history dating back to thenineteenth century. It is only in recent years that their use has beenpopularized again in the private…

1837

Abstract

Audit committees have a relatively long history dating back to the nineteenth century. It is only in recent years that their use has been popularized again in the private sector. Fundamentally, it is often argued that audit committees exist to mediate between executive directors and auditors while providing an overall enhancement of corporate accountability. One of the recent effects of the drive to incorporate business methods into other sectors has been the establishment of audit committees. It does, however, pose the question of the role of these committees which are operating in a different context from their origins. Looks at the operation of audit committees in a defined sector, namely universities. Using a postal questionnaire, all directors of finance (or equivalent) in UK universities were surveyed to establish whether or not audit committees existed in their institutions, the purpose being to determine the extent of audit committees, the reasons why they have or have not been established, and the advantages and problems encountered with them. One interesting result that arose with implications for accountability and governance was that in universities the stewardship and strategic policy‐making functions are generally separate and that audit committees report only on the former. This is in contrast to the situation in the private sector where both functions are generally combined in the activities of the board of directors. Because there is considerable overlap between the membership of audit committees and the boards of directors, it could be argued that this provides the potential for a greater degree of accountability and governance than currently exists in universities.

Details

Managerial Auditing Journal, vol. 10 no. 6
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 10 October 2008

Jack Armitage

The auditing educational process needs to be reevaluated in light of changing conditions so that it can adequately prepare students to function in the current environment…

2573

Abstract

Purpose

The auditing educational process needs to be reevaluated in light of changing conditions so that it can adequately prepare students to function in the current environment. Utilizing two world‐wide surveys of auditing professors, the purpose of this paper is to extend prior research by identifying how auditing professors rank the importance of 41 topics typically included in an auditing course and, in addition, identify the significant changes in the topics' importance between the survey conducted in 2000 and repeated in 2005. The paper also aims to examine the focus, emphasis, prerequisites, required status, and level of university auditing courses.

Design/methodology/approach

The study is based on the results of two questionnaires. The professors surveyed were identified from Hasselback's 2000‐2001 and 2005‐2006 Accounting Faculty Directories. The first questionnaire was mailed in November 2000 and the request to participate in the 2005 survey was e‐mailed in July 2005.

Findings

The most important topics indicated from the 2005 survey are audit risk, understanding internal control structures, types and sources of evidence, standard audit reports, and financial statement assertions. The most important topics from the 2000 survey are types and sources of evidence, audit risk, standard audit report, materiality, and understanding internal control structures. Topics with the largest increases in importance between 2000 and 2005 are reports on internal control, fraud awareness, working papers, and auditing history. Topics with the largest decline in importance are assurance services, information systems auditing, computer auditing techniques, governmental/not‐for‐profit auditing standards, and legal liability of auditors. Other results show that the first auditing course is usually focused on external auditing only, is usually required, offered at the undergraduate level, and the most common prerequisite is intermediate financial accounting.

Research limitations/implications

Research limitations include the possibility of non‐response bias, the type of survey instrument used between the two surveys, and the source used to draw the sample.

Practical implications

For auditing classes to remain relevant and to equip students with the knowledge and skills necessary to become tomorrow's successful auditing practitioners, auditing professors must continue to reevaluate their auditing courses in light of the changing business environment, requirements placed on auditors by society, changes in professional auditing standards, current research in auditing, and practitioners' needs.

Originality/value

The paper makes a contribution to the existing literature by adding comparability between two surveys at different points in time so that professors can identify the trends and importance of topics in auditing education.

Details

Managerial Auditing Journal, vol. 23 no. 9
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 1 March 1991

Janet L. Colbert

Business risk and inherent risk both bear on the audit; the auditrisk model; and the nature, timing, and extent of work performed.Inherent risk and business risk bear an…

1733

Abstract

Business risk and inherent risk both bear on the audit; the audit risk model; and the nature, timing, and extent of work performed. Inherent risk and business risk bear an inverse relationship to detec‐tion risk and have a direct effect on the level of work performed. Neither risk can be eliminated totally and neither is controllable by the auditor. Business risk relates to the financial statements and affects overall audit risk; inherent risk applies to an individual audit area. Inherent risk is explicitly included in the professional standards and the audit‐risk model while business risk is not and has only an indirect bearing on the model. Management can take steps to affect the level of inherent risk, but the perceptions of users of the financial statements bear on business risk.

Details

Managerial Auditing Journal, vol. 6 no. 3
Type: Research Article
ISSN: 0268-6902

Keywords

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